Panama City: Panama and the Global Economy

Keynote Speakers:

• Martín Torrijos, President of Panama
• Samuel Lewis Navarro, Vice president and Minister of Foreign Affaires
• Héctor Alexander, Minister of Economy and Finance
• Alejandro Ferrer, Minister of Commerce and Industry
• William A. Eaton, Ambassador of the United States to Panama
• Federico Antonio Humbert Arias, Ambassador of Panama to the United States

Conference Panelists:

• José Barros, Sub-Administrator, Panama Canal Authority
• Alfredo de Angelis, Director, Head of Latin Americas Infrastructure Principal Finance, Merrill Lynch & Co., Inc.
• Thomas Gales, President, Latin American Division, Caterpillar Inc.
• Domingo Latorraca, President, Chamber of Commerce, Agriculture and Industry, Panama
• Juan Carlos Mastellari, President, APEDE
• Stanley Motta, Chairman of the Board, Copa Airlines
• David Ramirez, Special Representative, Andean Region & Central America, Mizuho Corporate Bank, Ltd.
• Carl Ross, Senior Managing Director, Bear Stearns & Co. Inc.
• Susan Segal, President and CEO, AS/COA
• Robert Sifón Arévalo, Associate Director, Latin America Sovereign Ratings Group, Standard & Poor's

Summary
The Panama City Conference focused on the future of Panama as a destination for foreign investment and economic development in the global market. Speakers and panelists discussed the future of Panama in the global economy, the growing economic relationship between Panama and the United States, as well as the role of infrastructure, technology and competitiveness in Panama’s economy. Prominent government ministers and private sector analysts offered participants first-hand analysis of the country’s economic and financial outlook, focusing on future opportunities and challenges.

Panama in the Eyes of Wall Street

There was a general consensus that Panama is a safe place for international investment, and will continue to be so in the coming years. President Martín Torrijos highlighted the importance of inviting the international community to Panama and growing confidence in business investment there. Introducing the panel, Finance Minister Hector Alexander noted that sectors including construction, transportation and communications, have grown at least 13 percent since 2005, with banking and tourism accounting for largest increases at nearly 17 percent and 22 percent respectively. In addition, Standard & Poor's Roberto Sifón Arévalo indicated that Panama has stable and positive prospects for the future, especially given the growth of the Panamanian economy. Panelists agreed that the increased confidence in and stability of Panama’s economy attracts investors from abroad and stimulates growth.

U.S.-Panama Relations

Both Ambassadors Federico Antonio Humbert Arias and William Eaton agreed that the economic and political relationship between Panama and the United States was solid and likely to grow stronger in the coming years. Ambassador Humbert emphasized that U.S. investment in Panama surpasses the total amount of investment in the rest of Central America and that this tendency would continue. The ratification of the U.S.-Panama Free-Trade Agreement would further strengthen this relationship. Both ambassadors remained unsure whether this deal would gain approval this year, but remain optimistic about a positive result in the future.

The Role of Infrastructure, Technology and Competition

Speakers highlighted the importance of infrastructure and technology in competitiveness. Commerce Minister Alejandro Ferrer highlighted several specific examples of infrastructure projects and the role they played in Panama’s economy. Specifically, he spoke of projects such as the $1.5 billion dollar upgrade of the national harbor system, allowing capacity to increase from 4 TEUS (Twenty-foot Equivalent Units) to 6 TEUS and boosting Panama’s standing as a commercial hub. In addition, Ferrer discussed Panama’s interest in Occidental Petroleum building an oil refinery—a significant move that would sustain Panama’s growing energy demands.

Merrill Lynch’s Alfredo de Angelis stressed that Panama is at the crossroads of global trade and that the Panama Canal Expansion, the development of roads and airports, and industrial development serve as keys to Panama’s future success as a global competitor. Caterpillar’s Thomas Gales commented that Panama’s proximity to South America, as well as the opportunity of an expansion of the service industry, will allow Panama to create a solid relationship with the global market through the development of its infrastructure.